Before Netflix made its winning bid for Warner Bros., its co-CEO pitched President Donald Trump directly on the merits of the deal.
The pair found common ground, Netflix co-CEO Ted Sarandos said.
“The president’s interests in this are the same as ours, which is to create and protect jobs,” Sarandos said of Trump at the UBS media conference on Monday afternoon.
Sarandos said he’d talked to Trump “many times since the election about the different challenges facing the entertainment industry.”
“The president cares deeply about the entertainment industry, and he loves the entertainment industry,” Sarandos continued.
Trump praised Sarandos on Sunday, calling him a “great person” who he said had done “one of the greatest jobs in the history of movies.” Still, Trump said Netflix’s “big market share” in the streaming space “could be a problem” as it tries to buy Warner Bros. Discovery’s streaming and studio assets.
The Netflix-Warner Bros. deal reached on Friday is worth $82.7 billion, including $72 billion in equity. WBD’s TV networks like CNN or HGTV, aren’t in the proposal.
Rival suitor Paramount Skydance responded on Monday with a hostile bid in the form of a $30-per-share, all-cash offer for all of WBD, including the declining TV networks. Netflix’s offer is $27.75 per share, comprising mostly cash and some stock. There’s debate among analysts about whether Netflix’s or Paramount’s renewed offer is more attractive, as it depends on the value of WBD’s TV networks.
Paramount’s move “was entirely expected,” Sarandos said.
Paramount CEO David Ellison, who seems to be on Trump’s good side, went on CNBC on Monday morning to tout his company’s public offer as “pro-consumer, pro-creative talent,” and “pro-competition.” Ellison said his company’s offer had “faster regulatory certainty to close” than Netflix’s. Ellison’s father, Oracle cofounder Larry Ellison, is a longtime Trump ally and one of the richest people on the planet.
However, Netflix also seems to be building rapport with Trump. That could help explain why Netflix’s Sarandos and fellow co-CEO Greg Peters are optimistic about their deal.
“We are very confident that regulators should, and will, approve it,” Peters said of the WBD deal.
Sarandos pitched the streaming giant’s proposed acquisition as a net positive for the labor market, despite the concerns of many in Hollywood. He also said the company is “deeply committed” to releasing movies from Warner Bros. in theaters, “exactly the way they’ve released those movies today.”
That overture could help ease Trump’s concerns. Sarandos pitched Netflix as a great job saver.
“What the president has been interested in, in this deal, has been: To what extent does it protect and create jobs in America?” Sarandos said.
Sarandos warned that Ellison would implement lots of layoffs if his bid won and said the Paramount CEO promised about $6 billion in cost savings from a WBD deal. Those so-called “synergies,” in analyst jargon, translate to a smaller workforce, Sarandos said.
“Where do you think synergies come from? Cutting jobs,” Sarandos said. “We’re not cutting jobs — we’re making jobs.”
Netflix has promised investors $2 billion to $3 billion in its own cost savings from its Warner Bros. deal, however.
